Successful launch of Herbal Essences shampoos on the Eastern Europe consumer market in 2012 -2017 • Gaining a 10% market share in 5 years • Introducing a holistic marketing campaign Marketing Sales Finance Human Recourses Task Profit Structure Marketing expenses Supply Chain FPLC
Profit (? ) structure Our main concern is Market Share, which is, nevertheless, influenced by scale and cost of certain activities: Profit Revenues = Market Share Price per product 0% 10% Costs Number of units sold Marketing expences FPLC Units sold, influenced by marketing Per 1 imported unit Number of units imported TV commercial Cost of shooting a video Organization costs Print ad posters TV placement of the video Cost of creating a poster Cost of placing a poster Accidental sales Import cost Other Warehousing cost Cost of 1 second Size of the poster Transportation cost Length of the commercial Cost per size unit Other Task Profit Structure Market overview Marketing expenses FPLC
EE haircare market overview (1/2) It is a good idea to launch Herbal Essences shampoos in a premium segment, because: Shampoos segment has the biggest penetration (80% of potential customers buy shampoos) Premium Tier segment is the largest (BY VOLUME? ? ) and it’s growing Market Segmentation Premium Mid 80% 35% 20% Conditioners 40% Treatments > Task 45% Low Penetration Shampoos Profit Structure Marketing expenses FPLC Growth potential
EE haircare market overview (2/2) Consumer group Volume Share 2% 4% 5% 5% 45% 6% 55% Value Driven 6% 51% 8% 13% Moonstar Sunshine Twist Wella Eccol Superior Tomatoes Task Performance Seekers Pantene Affordable brands Profit Structure Marketing expenses FPLC Hypothesis: • Value Driven consumers purchase Affordable Brands • Performance Seekers purchase Premium Tier brands (our clients) We will be positioning our product as a Experiential shampoo
P&G is presented in: • Premium Tier/professional (Pantene, Wella) and in • Affordable Tier (Shamtu) P&G should enter • Premium Tier/Experiential with Herbal Essences. Task Profit Structure Marketing expenses FPLC
Transportation Ukraine Replenishment Points Kiev Transit Replenishme Inventor Times, nt Frequency y cover hours - Vinnitsa Lvov 7 Donetsk 13 Odessa 6 Simferopol 11 Once a month 1 month National inventory cover = 1 month Average transit time = 8 h Dedicated Fleet vs. Non-Dedicated Fleet 1 transit = 1 work day Profit Structure 7 Harkov Task 8 Dnepropetrovsk Our choice is based on: • Population density • Infrastructure capabilities 4 Marketing expenses Dedicated Fleet breakeven point = 10 transits per month 1 truck < 15 transits per month FPLC Number of transits per month <10 10 -15 15 -25 25 -30 30 -40 Fleet non-dedicated mixed
Sales, Palletes Year 1 2, 063 Year 2 3, 506 Year 3 5, 435 Year 4 7, 881 Year 5 10, 313 Warehousin Transportation g, mln$ expenses, mln$ 2. 1 46 3. 6 79 5. 7 119 8. 2 173 10. 7 222 TV, mln$ 0. 3 0. 4
Russia Replenishment People to be Points served, mln Ukraine • Each RP is serving several regions • Sales distribution forecast among RPs is based on the population proportion Coefficient Total vs. * VMI Replenishment People to be Coefficient Points served, mln Kiev 9. 3 0. 20 Vinnitsa 4. 1 0. 09 Lvov 8. 1 0. 18 Dnepropetrovs k 6. 2 0. 13 Harkov 4. 2 0. 09 Donetsk 6. 8 0. 15 Odessa 4. 7 0. 10 Simferopol 2. 7 0. 06 Total 46. 1 1. 00 CMI • Improved customer service • Reduced demand uncertainty • Reduced inventory requirements We are choosing Vendor Managed Inventory replenishment system • Reduced reliance on forecasting *Source: http: //www. vendormanagedinventory. com/article 6. php Task Profit Structure Marketing expenses FPLC
Sales strategy Distribution • Russia: Hypermarkets and Supermarkets • Ukraine: Superettes Pricing • Matches the Premium Tier pricing • Customer Margin at 12% (above average) preferable sales conditions for P&G products Shelving • Eye-level better visualability • Shampoos, conditioners, treatments are next to each other a consumer will buy the whole range of products Merchandising Point of sales materials: • Bright colors, visible HS logo • Slogans the same as in TV and Print advertisements*: «Сила первого впечатления» «Блеск солнца в твоих волосах» «Длина и сила» *Please, refer to full version in Doc file in attachments Task Profit Structure Marketing expenses FPLC H&S example
Human Resources Concerns Finance Are the employees receiving decent compensation? • To examine the Corporate Order on Bonuses and the Staff Schedule • To compare them to the market and make sure the compensation is competitive Supply Chain Depending on the Chosen system needed: 2 -4 workers to: • (VMI) check the stock in a system and make orders on fulfillment of RPs, make calls to RDs • (CMI) to receive orders on fulfillment and carry them out Sales Representatives are experiencing a growing workload • To hire more SR or • To make sure the overtimes are paid according to the law and Corporate Policy Sequence & ways of engagement with other departments • Monthly meetings with the Heads of the departments to see what can be improved • Feedback & grade system for promoting employees Task Profit Structure Marketing expenses FPLC http: //pg. com. ua/joinpg/career_in_pg. htm
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